Contributors at Motley Fool Canada (including myself) cooked up a list of 15 top stocks for December 2019. Actually, I had trouble choosing my top idea for this month as the market kept grinding higher. I chose Enbridge (TSX:ENB)(NYSE:ENB), a defensive name that’s fairly valued with a high dividend yield and a proven track record of dividend growth.
I’ll comment on some of my colleagues’ picks.
Another Solid Energy Dividend Payer
Two contributors picked TC Energy (TSX:TRP)(NYSE:TRP), a smaller peer of Enbridge in the energy infrastructure space. TC Energy is a quality dividend name also but Enbridge offers a bigger yield right off — 5.87% versus TC Energy’s 4.48%, which is just a little more defensive should a market correction happen soon.
The Renewable Energy Space
Two contributors chose a stock in the renewable energy space: Innergex Renewable Energy (TSX:INE) and TransAlta Renewables (TSX:RNW). Clean and renewable energy is a good space to be in as it has secular growth, but I don’t have a strong opinion about these two names in particular.
Given the run-up in utilities in general lately, I think it’s best for investors to consider the space when it’s out of favour again.
Contributors at Motley Fool Canada (including myself) cooked up a list of 16 top stocks for November 2019. I further reduced it to 5 top stocks that I like not just for this month but for the long term as well.
Four of the 5 stocks pay a dividend, including 3 dividend stocks that offer juicy but safe yields of up to 6.1%. Without further ado, the 5 top stocks are Alimentation Couche-Tard (TSX:ATD.B), Enbridge (TSX:ENB)(NYSE:ENB), Pembina Pipeline (TSX:PPL)(NYSE:PBA), SmartCentres Real Estate Investment Trust (TSX:SRU.UN), and Spin Master (TSX:TOY).
Enbridge and Pembina are both energy infrastructure companies, but Enbridge is markedly larger with an enterprise value of almost CAD$174 billion compared to Pembina’s more than CAD$34 billion. The rest of the stocks are in different spaces and together handily make a pretty diversified and quality portfolio.
Alimentation Couche-Tard for long-term growth
Couche-Tard just had a stock split recently. The growth stock has simply been taking a breather and consolidating after running up more than 50% from early 2018.
Couche-Tard is an exemplary M&A growth story. It has successfully acquired about 10,200 stores across 60 deals since 2004. In the period, the stock delivered total returns of 21% per year!
The company only yields 0.6%, but its payout has shot up at a rocket pace — over 8 years, its dividend has increased at a compound annual growth rate of 27.8%! Its last dividend hike in fiscal Q3 was 25%!
Going forward, as Couche-Tard has matured and heading into its 40th year next year, it’ll be shifting its growth focus from 70% acquisitions and 30% organic in the past to 50% from each. Management still sees growth by acquisition opportunities in the fragmented fuel and convenience industry.
Today, at $39 and change per share, the stock trades at a forward price-to-earnings ratio (P/E) of 18.5, which implies a decent PEG ratio of about 1.6 based on the estimated earnings growth of 10.6-12.3% per year over the next 3-5 years.
Enbridge offers a safe 6.1% yield and stable growth
Enbridge has worked hard and come a long way after taking on too much debt to acquire Spectra Energy in 2017 and selling off non-core assets to reduce the debt levels.
The stock was also depressed by delays in the Line 3 Replacement project. That said, if Enbridge successfully places the Canadian portion of the project into service as it plans to for this quarter, the stock should shoot up much higher by year end.
Thousands of investors found the following articles useful last week; you might, too! In these articles, I talked about what I learned from the financial crisis of 2008 and how it applies to the current market downturn, tips for new investors, and what not to do in a falling market.
Top Article: What I Learned From the Financial Crisis of 2008
Investors who experienced the financial crisis of 2008 would remember the scary experience. For example, the Big Five Canadian banks fell 50% from the 2008 highs to the 2009 lows.
I bought shares of Bank of Nova Scotia (TSX:BNS)(NYSE:BNS) after it fell about 24% from its 2008 high. Yet, it went on to fall another 30%. To learn how I reacted, what lessons I learned, and how I applied the experience to the current market downturn, read more at What I Learned From the Financial Crisis of 2008.
Top Article #2: Tips for Smart Investing
Investing is not exactly easy, but it doesn’t have to be complex either. New investors can start by buying only quality, dividend stocks when the market is down. That way, you’re not paying too much for companies; lower prices also gets you a higher income to start. How?
Just in October, Canadian Imperial Bank of Commerce (TSX:CM)(NYSE:CM) cost as much as $102 per share and yielded only 4.4%. Today, after the pullback, it only costs under $88 per share and yields almost 5.3%. Immediate income boost!